Information

High energy prices set to drive 2 GW of rooftop PV in Australia this year

Author: Darvin Tocmo
Date Posted:23 April 2019

First-quarter data from Green Energy Markets shows double the uptake of small-scale rooftop solar on the same period last year as record numbers of residential and business consumers seek to reduce electricity bills. A tendency for installations to increase toward the year end suggests more than 2 GW of solar will hit the rooftops this year. But could this become a cautionary tale?

Green Energy Markets today released its Renewable Energy Index April update with data showing more than 480 MW of small-scale rooftop PV capacity was installed in Australia in the first three months of the year. That is an incredible 48% higher than the amount installed in Q1 last year, and 2.5 times greater than the Q1 average achieved over the past four years.

The surge has been largely driven by a blanketing of Victorian roofs in response to the state government’s Solar Homes program, under which 30,000 of an intended 700,000 residential properties have already signed up for rebates.

“The Victorian government rebate has really turbocharged sales in Victoria,” said Green Energy Markets’ Tristan Edis at the Smart Energy Conference (SEC) this month. “It’s also spectacular in that we’re seeing ongoing robust sales in other states as well, with perhaps the exception of Western Australia.”

Edis said consumers continue to install solar in an effort to reduce power bills blown out by high energy prices, which rose sharply in 2016 due to the combined effects of the closure of the Hazelwood Power station and a doubling – in some cases tripling – in the wholesale price of gas.

The Green Energy Markets report shows Australian rooftop solar installations in March alone gave 7,857 people meaningful employment – last month saw enough capacity installed to power 48,965 homes.

If the current rate of growth in rooftop PV is sustained until the end of 2022, the report says, “it would provide additional generation greater than that due to be lost from the closure of Liddell Power Station”. The 46-year-old coal-fired Liddell plant is scheduled to close in 2022, reducing generation capacity in the grid by 1,680 MW.

According to Green Energy Markets, new first-quarter rooftop capacity would deliver a reduction in power bills of more than $850 million (US$610 million) over 10 years, based on today’s electricity prices.

And therein lies a conundrum, said Edis. In terms of time-of-day generation profile, he said, rooftop solar is currently “knocking a little off the top” of gas generation in the grid.

By 2020-2021 extrapolating the likely amount of rooftop generation, he says, would take out all the capacity currently supplied by gas during the middle of the day and also, “munch out a fair chunk of coal”.

The issue is that as rooftop PV reduces the energy demand profile from 9am to 3pm to a similar profile currently seen between 2am and 5am, wholesale electricity prices will decline, reducing costs for customers. “It’s great news for consumers,” said Edis. “It’s great for greenhouse gas emissions.” But part of the good-news gain – much lower wholesale electricity prices – poses a potential stumbling block for the solar industry.

Reduced power prices – the holy grail of residential and commercial consumers – could put a natural brake on rooftop installations and also change the economics of large scale renewable projects.

Edis said although Victoria’s Solar Homes program has fanned the installation of solar across the residential landscape, another factor boosting rooftop capacity is an increase in the size of systems installed. He said the average capacity of a residential solar installation is now above 6.6 kW. The Clean Energy Australia Report 2019 confirmed the average size of household systems has increased from 1.3 kW in 2009 to 7.13 kW in 2019.

That means, said Edis, because people don’t use all the solar energy they generate – mainly in the middle of the day – “the vast majority of generation is exported” and exporters make money based on the wholesale price of electricity, which generally sets the feed-in tariff. That means the economics of people upsizing systems also depends on the wholesale price of electricity.

Edis emphasised that would be great news. “It’s what we hoped would happen,” he told the renewable industry crowd at the SEC, “but we’re going to see a material reduction in the wholesale price of electricity when the sun is shining and the solar system is generating – and that’s not necessarily great news for ongoing growth in the sector. And it’s not necessarily great news for those who have invested in large solar systems.”

Australia’s energy system is still in transition, with the anticipated uptake of electric vehicles soon to influence supply and demand at a household level and electrification of other sectors of the economy adding load as renewable capacity expands. SEC speakers agreed the need for monitoring and planning the emerging renewables-based energy system has never been greater, to ensure abundant, clean, low-cost energy that fuels demand while substantially reducing the carbon load on the planet.

Want to stay in the loop?

We'll keep you updated with the latest deals, so that you'll never miss out!

Popular Categories

Terms & Conditions

Welcome to our website. If you continue to browse and use this website, you are agreeing to comply with and be bound by the following terms and conditions of use, which together with our privacy policy govern Optimus Energy’s relationship with you in relation to this website. If you disagree with any part of these terms and conditions, please do not use our website.

The term ‘Optimus Energy’ or ‘us’ or ‘we’ refers to the owner of the website whose registered office is 26 Humphries Tce, KILKENNY, SA, 5009, AU. Our ABN is 21 606 745 679 . The term ‘you’ refers to the user or viewer of our website.

The use of this website is subject to the following terms of use:

The content of the pages of this website is for your general information and use only. It is subject to change without notice.

Neither we nor any third parties provide any warranty or guarantee as to the accuracy, timeliness, performance, completeness or suitability of the information and materials found or offered on this website for any particular purpose. You acknowledge that such information and materials may contain inaccuracies or errors and we expressly exclude liability for any such inaccuracies or errors to the fullest extent permitted by law.

Your use of any information or materials on this website is entirely at your own risk, for which we shall not be liable. It shall be your own responsibility to ensure that any products, services or information available through this website meet your specific requirements.

This website contains material which is owned by or licensed to us. This material includes, but is not limited to, the design, layout, look, appearance and graphics. Reproduction is prohibited other than in accordance with the copyright notice, which forms part of these terms and conditions.

All trademarks reproduced in this website, which are not the property of, or licensed to the operator, are acknowledged on the website.

Unauthorised use of this website may give rise to a claim for damages and/or be a criminal offence.

From time to time, this website may also include links to other websites. These links are provided for your convenience to provide further information. They do not signify that we endorse the website(s). We have no responsibility for the content of the linked website(s).

Your use of this website and any dispute arising out of such use of the website is subject to the laws of Australia.

Privacy Policy

This privacy policy sets out how we uses and protects any information that you give us when you use this website.

We are committed to ensuring that your privacy is protected. Should we ask you to provide certain information by which you can be identified when using this website, then you can be assured that it will only be used in accordance with this privacy statement.

We may change this policy from time to time by updating this page. You should check this page from time to time to ensure that you are happy with any changes.

What we collect

We may collect the following information:

name and job title

contact information including email address

demographic information such as postcode, preferences and interests

other information relevant to customer surveys and/or offers

What we do with the information we gather

We require this information to understand your needs and provide you with a better service, and in particular for the following reasons:

Internal record keeping.

We may use the information to improve our products and services.

We may periodically send promotional emails about new products, special offers or other information which we think you may find interesting using the email address which you have provided.

From time to time, we may also use your information to contact you for market research purposes. We may contact you by email, phone, fax or mail. We may use the information to customise the website according to your interests.

Security

We are committed to ensuring that your information is secure. In order to prevent unauthorised access or disclosure, we have put in place suitable physical, electronic and managerial procedures to safeguard and secure the information we collect online.

How we use cookies

A cookie is a small file which asks permission to be placed on your computer's hard drive. Once you agree, the file is added and the cookie helps analyse web traffic or lets you know when you visit a particular site. Cookies allow web applications to respond to you as an individual. The web application can tailor its operations to your needs, likes and dislikes by gathering and remembering information about your preferences.

We use traffic log cookies to identify which pages are being used. This helps us analyse data about webpage traffic and improve our website in order to tailor it to customer needs. We only use this information for statistical analysis purposes and then the data is removed from the system.
Overall, cookies help us provide you with a better website by enabling us to monitor which pages you find useful and which you do not. A cookie in no way gives us access to your computer or any information about you, other than the data you choose to share with us.
You can choose to accept or decline cookies. Most web browsers automatically accept cookies, but you can usually modify your browser setting to decline cookies if you prefer. This may prevent you from taking full advantage of the website.

Links to other websites

Our website may contain links to other websites of interest. However, once you have used these links to leave our site, you should note that we do not have any control over that other website. Therefore, we cannot be responsible for the protection and privacy of any information which you provide whilst visiting such sites and such sites are not governed by this privacy statement. You should exercise caution and look at the privacy statement applicable to the website in question.

Controlling your personal information

You may choose to restrict the collection or use of your personal information in the following ways:

whenever you are asked to fill in a form on the website, look for the box that you can click to indicate that you do not want the information to be used by anybody for direct marketing purposes

if you have previously agreed to us using your personal information for direct marketing purposes, you may change your mind at any time by writing to or emailing us.

We will not sell, distribute or lease your personal information to third parties unless we have your permission or are required by law to do so. We may use your personal information to send you promotional information about third parties which we think you may find interesting if you tell us that you wish this to happen.

If you believe that any information we are holding on you is incorrect or incomplete, please write to or email us as soon as possible at the above address. We will promptly correct any information found to be incorrect.